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LORI MCLEOD

Globe and Mail Update

August 29, 2008 at 4:09 PM EDT

Resale home listings cracked the 80,000 mark last month, the highest level ever reached, according to data released Friday by the Canadian Real Estate Association (CREA).

New listings on the Multiple Listing Service (MLS) soared to 80,147 nationally in July, up 14.4 per cent year-over-year. The number of resale homes that hit the market rose by 1.4 per cent from the month before and 0.5 per cent from the previous record set in May 2008.

While listings surged, sales slumped by 12.2 per cent year-over-year to 48,748 units in July. The average home price declined by 2.4 per cent to $302,298.

The significant increase in supply has been the result of declining affordability in a housing market which experienced double-digit yearly price gains from 2002 to 2007, said Craig Alexander, deputy chief economist at Toronto-Dominion Bank.

Unlike in the U.S., a large part of the surge in listings in Canada is coming from people looking to cash in before prices either cool further or decline, a sharp contrast to the forced selling that is taking place in the U.S. as homes go into foreclosure, he added.

Last month Ontario and Quebec reached new listings records, and the number of existing homes for sale in Manitoba reached their second-highest level this decade.

Those gains offset a decline in Alberta, where listings continue to decline from a peak hit in March.

Listing surged the most percentage-wise in Saskatchewan (up 42.5 per cent), Manitoba (up 31 per cent), and British Columbia (up 21.1 per cent).

Friday's data includes all of Canada, and expands on a report of the country's major markets released by CREA earlier this month.

While listings surged, sales slumped by 12.2 per cent year-over-year to 48,748 units in July.

Sales plunged the most in British Columbia, where they were down 37.3 per cent, followed by the Yukon and Saskatchewan, which were down 26.7 per cent and 24. 9 per cent respectively. Sales rose the most in Manitoba, which had a 12.4 per cent increase, and in the Northwest Territories (up 11.8 per cent), and Newfoundland (up 11.5 per cent).

The average home price declined by 2.4 per cent year-over-year in July to $302,298. Prices fell the most in the Northwest Territories, albeit on a relatively small base, down by 26.7 per cent to $272,779. Prices also declined in the Yukon (down 9.6 per cent), Alberta (down 5.2 per cent), the Prairie provinces (down 0.9 per cent), and British Columbia (down 0.4 per cent)

Prices rose the most in Saskatchewan (up 29.9 per cent), Newfoundland (up 18.7 per cent), and Manitoba (up 13.5 per cent).

These provinces are the most likely to follow Alberta into a slowdown in the coming months, Mr. Alexander said.

While prices will likely drop further in some regions, this should only be troubling for people who bought recently with plans to flip their home quickly, rather than those who have a medium-term time horizon, he added.
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